On Mon, Aug 1, 2022, 6:15 AM John Clark <[email protected]> wrote:
> On Sun, Jul 31, 2022 at 4:12 PM Jason Resch <[email protected]> wrote: > > >> So bitcoin can avoid problems if they can just find somebody that >>> everybody agrees is a saint. But you could say the same thing about the >>> US dollar if everybody agreed that the Chairman of the Federal Reserve is a >>> saint. >>> >> >> *> You don't need a saint. That's the genius of the protocol design, a >> trusted system without any trusted individuals. You just need no majority >> of the nodes to be working against the system.* >> > > Bitcoin is between a rock and a hard place. If the number of miners is > reduced the energy efficiency increases but the security declines because > it allows the elite to spend one of their Bitcoins and keep it too. > It is possible bitcoin has much more security than it needs for practical purposes. In which case energy usage could decline without practically reducing the security of the system. After all, the energy usage of bitcoin was much lower in the past and there were no 51% attacks against it. If the number of miners is increased the security gets better but the > energy required to complete an economic transaction increases. > I would have said "used" rather than "required", but otherwise I agree. If you use Bitcoin or anything like it and you want honesty then you're > going to have to expend a ridiculous amount of energy every time you buy a > candy bar. > As it l is currently implemented, bitcoin only supports 7 transactions per second globally. It will never be able to scale to support individual transactions of candy bars or lattes. But "layer two" networks such as Lightning may enable this. Bitcoin then could be reserved for settlement of large transactions, while the Lightning system can support billions of microtransactions. > > *> Bitcoin allows one to freeze something of economic value (in this case >> energy) and convert it to money, after which it can facilitate an unlimited >> number of transactions basically for free and indefinitely, until it is >> lost/or destroyed.* >> > > As the number of bitcoins approaches 21 million the amount of energy > required to mint a new one will increase exponentially and will approach > infinity asymptotically. > Not necessarily, because as I explained the block reward decreases too. So the economic incentive also decreases. It will never make sense to spend more money on energy to mint a coin than the value of the coin. Your theory of what will happen with bitcoin would conclude a gold miner will put in exponentially more and eventually infinite energy into mining a gold mine that is drying up. It doesn't make economic sense, and won't happen. They'll shift their energy and resources into more productive areas. As bitcoin mining becomes less productive, fewer will do it. This leaves only the transaction fees as an incentives for miners to continue. Perhaps worth a few thousand dollars per block currently. I don't see why mining fees would increase exponentially. That's just not going to work. When Satoshi Nakamoto invented Bitcoin I > doubt if he gave energy a single thought, but then I don't imagine he ever > figured it would get as big as it has. > > *> Note that this same process underlies the creation of money in existing >> monetary systems: E.g., invest energy in mining gold. The amount people >> will spend to mine new gold is related to the price of gold.* >> > > Energy cost is one factor that determines the price of gold but not the > only one nor the most important one. And gold is irrelevant, it hasn't been > an important factor in the world economy in over a century, but paper money > has. And unlike Bitcoin it doesn't take an exponentially increasing amount > of energy to run a printing press. > You conveniently (for you) cut out my paragraph showing the printing press does require vast expenditures of energy. Since printed money is based on debt, and debts are typically secured against assets of value which required great expenditures of energy to produce (in line with the value of the asset, and therefore in line with the amount of money created). Since these assets eventually decay and lose value, more energy must be expended to create new assets and new loans to keep the amount of money roughly constant (or at least in line with the economy's size). With bitcoin at least, money is created with only a one time expenditure of energy. It doesn't disappear as an asset depreciates and or as the debt is repaid. Jason > John K Clark See what's on my new list at Extropolis > <https://groups.google.com/g/extropolis> > vhe > > -- > You received this message because you are subscribed to the Google Groups > "Everything List" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > To view this discussion on the web visit > https://groups.google.com/d/msgid/everything-list/CAJPayv28Cp89zWGoof2ibZGs3TChdeqS-45jf4_h2gXGhTS8SA%40mail.gmail.com > <https://groups.google.com/d/msgid/everything-list/CAJPayv28Cp89zWGoof2ibZGs3TChdeqS-45jf4_h2gXGhTS8SA%40mail.gmail.com?utm_medium=email&utm_source=footer> > . > -- You received this message because you are subscribed to the Google Groups "Everything List" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. 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